P
eter Hoskins, a business reporter for BBC News, reports from Singapore. Evergrande's debt crisis was triggered by its aggressive expansion into various sectors beyond real estate development. Founded in 1996 by Hui in Guangzhou, southern China, the company had over 1,300 projects under development across 280 cities in China.

    Evergrande's businesses spanned wealth management, electric cars, and even owning a controlling stake in Guangzhou FC, one of China's most successful football teams. At its peak, Hui was Asia's richest person with an estimated fortune of $42.5bn (£31.6bn). However, his wealth plummeted as Evergrande's problems deepened.

    The company's troubles began when the Chinese government introduced new rules to control debt in 2020. Evergrande struggled to meet interest payments on its debts after offering properties at major discounts to ensure cash flow. Since the crisis started, Evergrande's shares have lost over 99% of their value. In August 2023, the firm filed for bankruptcy in New York to protect US assets.

    Evergrande's problems have significant implications for China's economy. The real estate industry accounts for about a third of the country's GDP and is a major source of revenue for local governments. The crisis has impacted investment, fund-raising activities, and allied industries like construction, which provide huge employment opportunities. At the grassroots level, it has hit ordinary people hard, as many families have invested their savings in property.

    The Chinese government has taken measures to support the industry and economy, including providing low-interest loans for state-controlled banks and incentives for home buyers. However, it did not offer direct bailouts to struggling developers, partly to avoid encouraging more risky behavior. The ruling Communist Party's economic priorities have shifted towards high-tech manufacturing, renewable energy, electric vehicles, automation, and robotics under President Xi Jinping's leadership.